Optimization of Failure-Prone Continuous-Flow Transfer Lines with Delays and Echelon Base Stock Policy using IPA

This paper addresses the optimization of failure-prone transfer lines with important delays for material transfer, constant demand and echelon base stock policy for production control. For this purpose, we first propose an original continuous flow model. Machines are subject to time-dependent failures and times to failure and times to repair are random variable with general distribution. Contrary to traditional continuous flow models in which material transfer from one station to another one is instantaneous, in our model, material flowing out a machine waits a period of time called delay for material transfer before arriving at its downstream buffer. The second goal of this paper is to present a simulation-based optimization method for determining optimal base stock levels in order to minimize the long run average cost including inventory holding cost and backordering cost. The optimization algorithm is based on the infinitesimal perturbation analysis (IPA) technique for estimation of gradients along the simulation